Effect of Corporate Social Responsibility and Good Corporate Governance on Firm Value

Abstract

The purpose of this study is to examine the impact of corporate social responsibility and good corporate
governance on firm value. This study focuses on banking companies that are publicly traded on the
Indonesia Stock Exchange between 2019 and 2021. The dataset consists of financial statement data from
a total of 72 organizations. The sample was selected using a purposive sampling technique based on
predetermined criteria and then analyzed using multiple linear regression method. The findings of this
study indicate that corporate social responsibility has a significant impact on firm value, but good
corporate governance does not have a significant effect on firm value. The implication of this research is
that banking companies are expected to increase their commitment to corporate social responsibility
programs as a way to increase the trust and perception of investors, the government and the surrounding
community who are stakeholders. Companies also need to evaluate the strategy of using good corporate
governance, because although good corporate governance remains important for managing risk and
corporate sustainability, companies need to consider how corporate social responsibility elements can be
integrated into their good corporate governance framework in order to achieve better results.